Reducing available credit

twinklesarah28

Hi,

I have tried searching but have not found the answer, I am wondering if it will improve my credit score if I have a credit card which I am working at paying off (Intrest free), the balance is £3000 outstanding & they have recently increased my limit to £8000!! Will it improve my credit score if I ask for this to be reduced or not make a difference?

Thanks

reclusive46

Reducing it will look like your using more of your utilisation, which could actually look bad and look as though your using up all your credit.

Gromitt

No, asking for your credit limit to be decreased will have the opposite effect. It'll cause other lenders to wonder why it was decreased and they'll also see that you are using more of your available credit.

Once a credit card goes above 10K, I do like to reject the increase before it hits my credit report however.

BugsyBrowne

Some say having to much available credit is a negative thing & others says having a lot of available Credit is a good thing as its worked for some and not for others.
It's one of those we don't the actual facts how a lender would see it but we can guess.

chanz4

As bugys has said, we are guessing

InsideInsurance

There is no set rules and different lenders will see things differently. Therefore people can only talk in generalities.

Lenders do look at affordability if you were to max out all of your current lines of credit before giving you more hence having lots of unused credit can be an issue. At the same time however they do look at your utilisation rate (the higher the worse), maximum limits (higher the better) and number of accounts (lowish numbers better).

So if you had £8,000 limit and £3,000 balance it is better to have that in 1 card than it is to have it across 8 cards. If you do want to reduce your available credit it is generally better to look to close smaller lines of credit and leave the high limited ones where they are